Interview: Reading FC's financial woes examined with Yuan Yang, Labour MP for Earley and Woodley
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Hello and welcome to The Price of Football, the show that looks at the money behind the beautiful game. With me, Liverpool University's Kieran Maguire, and me, Liverpool University's Kieran Maguire. Today is an additional bonus show and we are having a chat.

with the Member of Parliament for Early and Woodley, Joanne Yang. And Joanne came to our attention because she asked some questions in the Houses of Parliament in relation to one of the Price of Football's naughty chair occupiers, Reading Football Club. So Joanne was very kind enough to give up some of her parliamentary time to allow me to have a chat with her. And this is what she had to say.

Hi, Joanne. It's so nice to have a chat with you. Reading Football Club, did you realise when you became an MP that this was going to be a big issue? Were you aware of the issues during the period of campaign? Yeah. So the great irony that I always think about is I was a journalist for most of my career at the Financial Times before I left to stand for, to be the parliamentary representative here.

And I left a career in which I was poring over the financial accounts of kind of baffling companies owned by complex foreign owners.

to a job where I'm pouring over the accounts of companies owned by complex foreign owners. So when I was standing to be the MP here, and in fact, before I was even selected, I remember being at one of our local fairs. It was the Woodley Carnival, I think it may have been a few years ago, on the Labour Party stall. And some Reading FC fans came over and we were talking about various different things.

And they brought up the ownership issue. I mean, of course, the current owners of Reading Football Club have been in place since 2017. So, you know, in the early 2020s, I think there was already some discontent around that.

And around that time, that conversation was mostly the fans saying to me, is there anything that you can bring from your background at the Financial Times and in looking at these issues to Reading Football Club? And so I was in conversation with the fans before I was selected to be the Labour candidate and then before I was elected to be the MP. So I was aware of...

of the great concern around this. And I suppose the privilege I have now is being able to be in more of a position to raise awareness around it, to ask questions about it in Parliament and to try and push out the issue more forcefully. Brilliant, brilliant. And have you had any relationship with the club? Because

As an outside observer, and we do a weekly show here on the price of football, fans of clubs say, if we appear on the price of football once every six months, that's fine. If we're on every week, we know that it's bad news. And unfortunately, Reading have been on the show. We've reached out to the club and we've never had much of a response. Have you managed to establish any dialogue with the club? Because...

it does appear to have a complicated structure in terms of ownership and also in terms of governance. Yeah. So my team and I do speak to the club. And in fact, one of my colleagues who you, I think you met when you came into Parliament, thanks for coming in here the other day to meet us, used to work for the club. And I have to say the club staff are obviously doing an incredibly difficult job against significant headwinds and significant uncertainty. And

And I think it's really important in all of this that we're supportive of what the staff are trying to do in keeping the club going, but also understanding the complexity of the ownership structure and the implications that means for the very, very much for the top of the staff leadership. There have been, as you know, many periods where the staff have not been paid their due wages. And that's a huge shame and extremely unfair for everyone involved,

And I think the staff are as keen as the fans and everyone else to make sure we have a sound financial footing for Reading Football Club.

And do you think it's appropriate for a member of parliament to get involved effectively, which is a constituency issue in respect of a football club, any more than perhaps a local builder's merchant or garage? There is this glib saying in football that football is the most important of the unimportant things in life. Have you observed that? Because presumably you've had meetings with fan groups and you've seen the degree of originality

of passion and love for that that they have for the for Reading Football Club? Definitely and it's a very good question in terms of what what an elected representative or a politician should be involved in and as you say from one perspective it's a private business, it's regulated to some degree we can obviously talk about the degree to which English football is regulated and how it should be regulated in the future and you might just say well just let the market get on and do its thing and you know why why should anyone else be involved

But as you mentioned, there is so much passion. It's a community asset and it's a club that generates significant sense of community belonging. And I think for many reasons, football and many other community institutions shouldn't just be seen as financial assets and shouldn't just be treated like financial assets.

And I think what concerns many fans is the potential that Reading Football Club by its owners has been seen as just another financial asset and has not been recognised for the role it plays in the community.

So because of the importance of it to my constituents, to the residents of early and woodley constituency, but obviously not just here in Reading, you know, I've met fans from much further afield as well in London and beyond in the Southeast. And, you know, there are fans across the UK. So for that whole fan base, it's really important. I think that they see their representative standing up for something that they love and that they believe in. Yeah, absolutely. I mean, you mentioned there, it's a financial asset, right?

I don't know any other industry where having wages at 240% of revenue is seen by certain stakeholders, not all, as being something which is the norm. And

Football is unique in the sense that the traditional profit-maximising, revenue-maximising model is set aside. We've got a lot of issues taking place in other leagues at present. The most profitable football club in the country over the course of the last 25, 30 years is Spurs. You talk to Spurs fans and you say, well, you should be proud that you've got the most profitable club. They say, well, look at our trophy cabinet.

So I think because we judge football on a different set of KPIs to traditional businesses, it has resulted in, for want of a better phrase, the rise of the trophy asset from owners domestically because they want to have a connection and that's the price they pay, but also on an international level.

You you are an elected member of parliament. There is at present the football governance bill going through the houses. I mean, from a again, from an observer's point of view, there seems to be an awful lot of filibustering to me, especially in the House of Lords with the huge number of amendments.

Could the football governance bill save Reading? Or are we looking in the rearview mirror when it comes to Reading and the bill, as far as you're seeing, is going to be based on trying to prevent...

future readings taking place. So about a week ago I met with the sports minister in her department in the Department for Culture Media and Sport along with fans from staff and the Supporters Trust and from Sell Before We Die which you might know as the... We've had them on the show yeah absolutely yeah and so and with the other MPs in the Reading area as well and I made the point that you make right now Kieran which is to say that you know

over the next six-month period, Reading Football Club, I think, needs particular special attention. And we want to make sure we get through this winter season and that we make sure that players, staff, salaries and so on are intact and

And beyond that, the fate of clubs like Reading will be structured through the Football Governance Bill, which is currently, as you say, going through the Lords. And given the slowness, I think, of the process through the Lords, you mentioned the filibustering, there have been quite a lot of amendments posed in the Lords, and we can get into the political reasons behind that, which I think are quite interesting as well.

it's likely to come back to the Commons, to the House of Commons in the second half of next year and then be passed into law. And of course then there's the process of actually making sure that the provisions are enacted and that the regulator is set up. Now the shadow regulator is already being set up as we speak and there have been staff already hired, but I am concerned that

that process, well, it will do, I think, very good things for the future sustainability of English football. And we also need to have a separate look at what's happening in Reading just because of the kind of time critical nature of the situation. So I'm aware of those two different tracks of activity that we need to have in my work and in Parliament's work. You mentioned the filibustering in the Lords, and I was trying to get my head around why it is that

there might be members of the Lords with opposition to this. Possibly, I mean, of course, I don't know the atmosphere of the Lords intimately because I'm not in the Lords, but going back to what you were saying earlier, Kiran, about why is this being treated any differently? It's a private business. I think there was perhaps also the

sense perhaps among the Tory benches that more regulation in general is a bad thing and there's certainly a political philosophy behind that kind of way of looking at the world and looking at markets. I think that's really misplaced in the realm of football and I think

You talk about the wage multipliers in football. When you look at the revenues and the media rights in the Premier League compared to the rest of the pyramid, as it were, the rest of the pyramid that supports the sustainability and the flow of players and talent through English football, I think it's quite far from what you might call a perfect market. You're absolutely right. And it certainly keeps observers busy when...

If you take the Premier League is rightly lauded for its success. The fact that they've just signed a new deal for Cambodia, Laos and Thailand. And I think that's what $500 million deal, six year deal is an incredible achievement. And we should be incredibly proud. And certainly as somebody that has the privilege to teach all over Canada.

The three institutions which always I'm quizzed about is you should be really proud of coming, being born in England. It's Royal Family, it's the BBC and it's the Premier League. And as soon as people hear that I'm sort of vaguely connected to football, that just opens up conversations. And there's so much passion and it's a fantastic product. The Premier League, in my view, doesn't have a revenue problem. It's got a cost problem. And the whole of football has a cost problem. And it's a cost problem which...

which as fans, I think we're reluctant to address as well, because the most common question I get asked is, can we spend more money? And I don't know any other business where a stakeholder would say, let's increase our costs and not worry about profitability and not worry about whether the revenue is going to cover that. And I think it is unique because we use these different KPIs. You mentioned that

that as far as the bill is concerned, you're thinking second half of 2025. The main issues that appear to be covered by the bill are owners and directors test, are perhaps giving extra weight to

effectively scrutinizing future owners and i think that's that that is a positive um we don't want to discourage people and personally if i was a potential investor i like the idea of investing in a business which has got good governance so i i think the criticisms there are are not not appropriate um as far as financial distribution is concerned um

That could be solved today. All you need is two people in one room walking out with both smiles on their faces and that can be sorted. And they've had the opportunity to do that for years. And I think that's probably for me the biggest driver.

Are there any other issues? Do you think the role of the regulator should be perhaps expanded or is it good having a relatively narrow remit and we let football do all of the football operational things? It's a good question. I think the different strands of work, as you've outlined, are the right ones for the regulator to be looking at. I think that there are, you know,

There are lots of different regulators for critical industries in the UK, you know, from water to football. And I think the strength of those regulators is often about how much, not just how much they are given in the letter of the law, but also how much institutional power they're given to really back up their work and their investigations.

So I'd really like to see that the regulator is given that amount of institutional power and credibility, staffing and resource to not be a kind of, you know, light touch around the edges of regulators, but to really go in and ask those quite fundamental questions that you've been asking about the sustainability of English football. That's right. And I mean, certainly, and you, as the Labour government, you inherited the

this bill from the previous administration. So when you're talking to your colleagues in Parliament cross-bench, do you see an underswell of this needs to be addressed? And it's not a party political issue. It's a broader issue because if I go to a football fan, who I vote for is to a large extent an irrelevance. I've got a blue and white scarf around my neck and I'm reading FC. Yeah, yeah, yeah. No, it's a really interesting question because

Right now, I'm in the process of coordinating what's called a backbench business debate, which is when the non-ministers backbenchers like me in the Commons can bring a debate of our own choosing. So usually Commons parliamentary time is set through the government and the ministers.

So the backbench business debates are a time for the rest of Parliament to put something on the agenda. And I would like to get a business debate on the sustainability of English football on the Commons agenda. Now, to do that, you need to have signatures from across the chamber and from different parties. And so my team and I were just talking yesterday actually about who would be the Conservative sponsors, possibly who might be the Lib Dem and other party sponsors of that bill.

And because of the situation that you've described, because of the state of the finances of many football clubs, you know, the football clubs that have been in trouble or who might be in trouble in the next few years, it's pretty much distributed across lots of different constituencies with lots of different colours of rosettes that their MPs are wearing. And I think that merely the kind of geographical nature of that brings different kinds of people to the table.

I think there may be, as I mentioned earlier, you know, among the Tory peers and among different members of parliament, a philosophical objection sometimes to the idea of regulating private markets. But I think this is a market, even to take that argument on its own, you know, on its own merit, I think this is a market that's in significant kind of

and is not, even if you think of it just as purely as a market in economic terms, it's not a market that's functioning very well. Beyond that, I'd also say that we should see football clubs as not just financial assets and not just parts of the competitive market, but as really important to the community that they're part of. I think you're absolutely right. And my personal view is regulator,

It's more of an indictment of the current governance system that we have in the game rather than a philosophical or an ideological introduction of bringing something into football. And also, as a football fan and also as an academic, those two activities for me don't fit well together because...

The best thing for Happen to Football, if I wanted to maximise revenues, is to host matches overseas. The best thing from revenue maximisation is to scrap season tickets and to scrap discounts for juniors and seniors and all of these things which are currently in the debate. So I think it's an appropriate thing to acknowledge that football in a secular society is this unique thing which brings us together. Yeah. I suppose you raised the question also of companies' law and,

you know, fiduciary obligations to, you know,

to maximise profits on behalf of shareholders and so on. And the question is that when you apply that to many aspects of the market, I think that's actually quite a narrow way of looking at the objective of a club. And many people who run businesses, I'm not just talking about football clubs, but many other businesses would have lots of different objectives of what they're trying to achieve with their projects and what they're trying to achieve for society. And Reading Football Club too has a number of associated charities. It has

tries to be present and active in the community and see itself as part of not just the stadium and the training grounds and the physical, tangible assets of the club, but also the community that it brings around it. So I would say that that way of that profit maximization way of looking at any business is quite a narrow way of looking at it.

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Kieran, our roles are reversed now because, of course, you're the journalist and I'm the MP in the hot seat. But if I can go back to my previous life and ask you some questions, would that be OK? I'd love to know what you would like to see from the football governance bill and what you think the government should be doing on football governance. In terms of governance,

I think we should have a narrow remit because if the role of the regulator is extended to emotive issues,

such as VAR, even things such as ticket prices, because we don't have price capping in any other industry. And I'm as much a music fan as I am a football fan. And there's no indication that when I go to see my favourite punk band this weekend at Chalk in Brighton,

The tickets were set by the market and I either pay it or I don't. So I think to single out football when you're not doing the same for rugby, you're not doing the same for F1, you're not doing the same for horse racing, would not be appropriate. As a football fan, I want to be given the opportunity to watch my team play

play in my town, in my stadium. Now, if there's a good case for moving the stadium, then engagement. And I think if...

I think if we have the bill which encourages engagement, that was one of the things I was very pleased to see. If we take a look at Brentford Football Club, for example, they've moved from one stadium to another. There was a fans group involved all the way through the decision. And Brentford are now doing spectacularly well in the Premier League. And I think they're a shining light of how things work. So I personally would not tweak...

the bill. My only concern is in respect of the issue of parachute payments. I don't think that they should be treated as a standalone issue.

They should be discussed as part of the overall distribution of money. The purpose of parachute payments was to reduce the likelihood of clubs going into administration following relegation, and that objective has been achieved. Now, has it caused a distortioning impact on the championship? Yes.

Has it also made the Premier League more competitive? I think there's an argument for saying that. Yes, as well. So that was my only concern. And I've got to take a little bit of responsibility here because I was at an APPG and I was asked the question about parachutes. Should they be within the remit? Yes, they should. But...

You can't deal with one financial issue in isolation unless you're taking a holistic approach. Does that mean that you would like there to be more consideration of distribution in the bill then, as in not just take the issue of parachute payments?

Well, I think if we take a look at the bill, I'm not saying it's a, it's effectively saying that the regulator is going to take a similar position to the Bank of England as a lender of last resort, i.e. the regulator is going to be the arbiter of the distribution as a last resort if the two parties in the shape of the Premier League and the EFL cannot come to a deal.

My understanding talking to journalists, to talking to some of your colleagues or people who were sort of effectively formerly your colleagues was,

We were very, very close to a deal. And all of a sudden it was withdrawn by the Premier League. And I think that's a shame. And if that had been the case 18 months ago, we would be looking at a completely different bill today, which would perhaps be focusing on an even narrower remit on perhaps the protection of the heritage issues, which to a large extent are box ticking. Reading are not going to go and decide to go and play in green and yellow Chevrons.

So they're the royals for a reason. They're blue and whites for a reason. So, you know, protection of the crest. I think those are sort of nice nostalgic issues, but they don't really warrant legislation. The owners and directors test, I think, is important. And perhaps creating a...

A scenario similar to what we see in other industries, the travel industry, in the sense that if you want to buy a football club, then you've got to go and put your money where your mouth is. You've got to put down a bond. And if your ownership fails to satisfy the appropriate parameters, then the club gets into distress and that money is used to buy time. And that's what's most important. We don't want any club to end up in a similar position to that of Bury Football Club or Macclesfield Town.

And I suppose that point you made about the deal goes back to the idea of if you had the right two people in the room saying the right things and agreeing on something, then a lot of, possibly a lot of the infrastructure of this bill wouldn't be necessary. But that's not the world that... No, no, it's not. I suppose my other question is,

As somebody who's watched the fallout for Reading Football Club, both as a member of the public in Reading, but now, of course, obviously as an MP, I think what's really struck me is the feeling from fans that not enough information is out there to help them understand what's going on with the club. And partly that's because in any discussion of takeovers and mergers and acquisitions in any industry, there'll be a tremendous amount of secrecy around deals, sizes and conditions, etc.

I was wondering, Kieran, what you think fans should be told about, made aware of, and anything you think Reading fans would benefit from hearing from you? I always believe that, you know, it's an old cliche, sunshine is really good when it comes to transparency and communication. Reading Football Club have

And here I think we've got to take issue with the owner and the senior executive team who may have been restricted by the owner. There is so much that we don't know. And I can understand that there are also broader issues with regards to the owner's personal circumstances, which I don't think we are entitled to know. People don't know how much money

If they ask me, I'll tell them. But there's no need to. I won't ask. Teacher salaries, they are what they are. And it's my choice to accept or not accept it. I think there's a broader issue in the sense that there's a frustration amongst the fan base that Dayonga has kept his own counsel. The club has been unable to...

set up a line of communication with the fan base

We therefore read huge amounts into everything and anything because Reading Football's hub is so precious and so important to the fan base. We did have a potential owner in the shape of Rob Kohik over the course of the summer. That relationship has sadly very much soured and there are concerns that that might impact upon the ability of this club to sell.

I think in terms of the owner's personal finances, again, we are relying to a certain extent on hearsay in the sense that does he have outstanding financial commitments elsewhere, which have been secured against the football club itself? I think here, perhaps the remit of the regulator could be an interesting one in the sense that

the football regulator should be kept aware of all security against the key assets of the football club, such as the stadium training facilities and so on. And we're not getting clear and clean answers.

if clubs decide not to publish their financial statements as is the case with Reading Football Club I've got a spreadsheet in front of me with a with 156 different clubs on and 155 of them have published their 2023 financial statements the one that hasn't is is Reading Football Club so could there be more severe penalties for owners that decide to go along that route and

And it's really important, I think, Kieran, that you say penalties for owners because, of course, the AFL has had a lot of penalties for the club. Yes. And that, in turn, I think, has really hurt staff and players and, of course, fans. But the ultimate kind of buck stops with the owner, which I think is the real problem that we're coming up against here. They should make him wear an Oxford United shirt. That would be the ultimate, wouldn't it? Yes.

Yeah, I mean, if only those kinds of fan plays would actually work on this particular own, I think. Yes. In a different situation. I suppose I will add that

I have spoken over the last few weeks with previous and prospective bidders for the club, and I have some hope that there'll be a resolution. And of course, that's not in my hands, nor is it in their hands, really. But it's one of the oldest clubs in the UK. There are lots of people who want to ensure its future.

And when I put out a column in the Reading Chronicle last week talking about what I was doing for the club and I kind of call out for help, particularly for those who might be willing with a corporate law background to help us do some searches on the owner and see what claims could be brought against him. I did get quite a lot of response back from members of the public who were just quite willing to devote some of their own free time to helping out. So I've been buoyed by that kind of response.

I think my natural temperament is to be a kind of cautious optimist. I see the resolutions that could happen. I see all the obstacles that are in the way. And I think that's probably what brings me into a profession like politics. So I'll...

you know i'll be at the game on saturday and i hope i'll be able to speak to lots of lots of fans there and i hope that we can get to a much better position in the new year it's not that is not in my my hands alone of course um but that's the hope that i hold we we have sort of semi-promised that we're going to do a a price of football live show we we go around i'm not saying i'm part of the entertainment business but my co-host kevin very much is uh we said

once the Redding's issue has been resolved. I don't think the current owners would invite us in. We will do a show from the Select Car Leasing Stadium and we might invite you along as a guest. It would be absolutely brilliant. It would be a great celebration. I've got to know quite a few of the fans.

I mean, you mentioned that clearly you have had conversations with fan groups, with people connected to the club, with people in the local community, etc.

In terms of a timeline, is there anything that we can perhaps sort of vaguely concern ourselves with? Because my concern and my background was that before going into academia, I was a chartered accountant. I specialised in insolvency. I'm aware of the issues of administration and so on.

And I'm looking at I look at money as a as a egg timer and I see Redding's money rapidly declining. They've got the benefits of the add on fees from Michael Alisa's sale. Is there anything that we can sort of cling on to as fans will be listening to this show in terms of how you think things can develop over the next few months?

I wish I could say yes for certain and unfortunately I can't. I know that, as you've seen reported, there have been a number of bids that have gone around in the last few months and the progress of those bids is sadly mostly in the hands, I think, of Dayonga and Daisho Lee, the current owners. And that's the kind of

that's the kind of immense amount of power that that ownership now brings without regulation um and so what i'd really like to see from the from the football governance governs bill is putting us in a situation where it's not just down to you know the the mood and whims of of one or two people the survival of a whole club as an institution um but i do i i do have a lot of hope that

that there are people who are interested. There are definitely people who are interested and who could be good stewards for the club. And, you know, I hope that they will eventually be able to take the club out of the hands of its present owner. In terms of timelines, I mean, as you know, the club filed its last accounts in June 2022. So it's quite some time ago. And there's obviously a reason behind that.

So first of all, a big thanks to Joanne for coming onto the show. I think she's been as comprehensive as she can be. So I'm hoping that Reading fans and fans of other clubs who are also going through some tough times at present will see that football is being taken significantly seriously by parliamentarians. The regulator is not going to be

here soon enough to deal with some of the crises that we are seeing at individual clubs. We know who's on the price of football naughty step well enough to not go into details of those individual clubs. But I do think that the direction of travel is the right one. My concern from listening to what you and said is,

was that there are vested interests in football that are trying to delay the implementation of the regulator. And the reasons for that, just like everything else we've seen as far as this show is concerned, is it comes down to money. If it costs £10 million a year,

to run the regulator and one of the main parties in football can delay paying perhaps £100 million across to the EFL, not naming any names, then you do the sums and you can see why the filibustering approach that we have seen in the House of Lords in particular is proving to be one that is of financial benefit. Okay, that's all done from me.

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